Financing Your Home Purchase

In recent years more and more consumers have complained on how hard their mortgage experience has been.  With tighter lending guidelines is no wonder that closings are not only taking longer many windup not closing after months of hard work.  Well my initial disclosure “this channel don’t share the same views of this post” isn’t that what they say on TV? The following are some of my personal views and experience and not a personal endorsement for any particular banking institutions, lenders, brokers and/or mortgage bankers.

The Trends

In recent months I’ve managed purchased transactions on both sides of the fence, either representing sellers or representing buyers.  One thing from these transaction has lead me to write this blog post.  The time that it has taken from contract acceptance to sitting at the closing table.  Some transaction handled by mortgage brokers “Brokers” and others by your everyday traditional lending institutions like the TD Bank, BOA, Valley etc “Banks”.  Both forms of seeking financing for your home are good I am not saying that one is better than the other but I notice over over a few transactions the time, process and readiness to deliver a clear to close seem to be in favor of the traditional lending institutions.  

The Buzz

I’ve heard from a few “street corner experts” BANKS ARE NOT LENDING! it’s hard to get financing etc.  Well I have to disagree at this point, I think Banks are eager to lend to consumer, if banks don’t lend they don’t make money.  But I have compare notes at the closing table in a two different categories.  1. Interest rates Broker vs Bank 2. Closing Cost Broker vs Bank.  My conclusion has been that Banks are offering far lower interest rates and lower closing costs that can translate in thousands of dollars savings for a home buyer.

The Programs

Lending programs between Banks and Brokers can be really complex and far apart one from the other.  Banks can offer portfolio products that they service themselves and not have to sale the paper on the wholesale market like Brokers.  What does that mean in layman's terms well I’m trying to wrap my head around it my self.  A simple explanation is Banks lend their own money they craft their own mortgage programs.  Most Brokers offer an array of programs that are available to them at wholesale pricing of course there has to be a markup on the product.  Bottom line Banks can offer you more cost effective products at lower costs, where Brokers can offer you a wide array of different products at a premium.

When to Use a Bank or a Broker

It’s not as simple as you may think, the final decision belongs to the individual consumer based on his/her need.  Brokers can service the vanila file and the not so vanila files where most Banks are limited to work with borrowers that enjoy above average credit.  When in doubt try your local Bank first, shop for your mortgage loan if they are unable to accommodate you in one of their mortgage programs don’t give up try a Mortgage Broker.  

Pablo Lopez, ABR®, SRES®, ePro®, SFR®, REALOTR-Associate®
Century 21 Elite Realty
337 Changebridge Rd
Pine Brook, NJ 07058
Office: 973-244-7980 Xt 215
Direct: 862-210-9299
Web: http://www.pablolopez.us
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